Residence in Jersey
Jersey - a desirable location
The Channel Islands, including Jersey and Guernsey, are situated about 14 miles from the coast of France and 120 miles from Southampton, England. A modern airport and an advantageous location enables Jersey to benefit from frequent and regular air services to London, Paris, Zurich and other airports in the United Kingdom, France, the other Channel Islands and Ireland, with regular sea travel to England and France.
The island of Jersey is not only known for its scenic beauty; it also enjoys a high European standard of living and offers a variety of options for leisure, eating-out and cultural activities. It is a paradise for golfing enthusiasts and people interested in water-sports. Residents also benefit from a high level of modern communication and associated facilities.
Shopping is a pleasure in Jersey. Many electronic, clothing and cosmetic products are about 20% cheaper here than in other countries in Europe due to Jersey's taxation policy - there is a low 5% Goods and Services Tax in Jersey compared to much higher Value Added Tax rates in Europe.
All financial institutions are regulated and supervised in Jersey by the Government's Finance and Economics Committee. Supervision is implemented by the Jersey Financial Services Commission which exerts close control over all financial institutions and trust companies.
High Value Residency Regime
The purchase and occupation of all residential real estate in Jersey is controlled by the Jersey Government, through its Housing Committee. Fundamentally, only persons possessing Jersey Housing qualifications are granted consent to purchase property.
It is possible, however, for high net worth individuals to obtain a licence, namely 2(1)E, which derives its name from Jersey’s current housing law.
To achieve High Value Residency status and be eligible to purchase property in Jersey the prospective applicant must make a major contribution to the Island’s tax revenues; at the present rates of tax, the annual tax contribution would be in the region of £125,000, calculated on a sliding scale based on 20% of the first £625,000 of world wide income and 1% on all income thereafter. Applicants are required to provide financial and other information in support of their application to take up residence in Jersey, evidencing sufficient capital wealth in order to produce in excess of £125,000 in tax revenues for the Island.
Once High Value Residency status has been granted, the applicant may apply for consent to purchase a property and will be granted the same status as other residentially qualified Islanders. They can be employed and employ and set up their own business in the Island and will be expected to purchase a single residential property worth in excess of £1m.
Technically, Jersey is a low tax area, not a tax haven, and derives its income principally from income tax, excise and duties. No taxes are levied upon capital, capital gains, inheritances, gifts, sales or turnover; nor are there any estate duties.
Though income tax is levied on the worldwide income of a resident, there exist opportunities whereby a new resident may limit his future exposure to income tax by the creation of non-Jersey trusts with the approval of the Jersey Government. Thereby, part of the applicant's income maybe protected from Jersey tax charge, leaving sufficient income to meet the required Jersey tax liability in respect of which the applicant will be required to give an undertaking to satisfy.
The island of Jersey benefits from a unique constitutional relationship with the United Kingdom and a negotiated special arrangement with the European Union, by which Jersey has retained its right to internal self-government and fiscal autonomy. Particularly, Jersey reserves the exclusive right to legislate on matters of purely domestic concern, which includes its own taxation, and it is not required now or in the future to adopt the fiscal policies of either the United Kingdom or the European Union.
Jersey has a long history of political and economic stability and follows a conservative political system. The sources for its prosperity are Jersey's finance centre activities, the receipt of investment income from abroad by immigrants attracted to the Island by its tax advantages, tourism and, to a lesser degree, agriculture and light industry. The sources of revenue, which meet the income requirements of the Island, are sufficient to generate regular budget surpluses without the need to raise the standard rate of income tax, which has remained at 20% since 1940.
Before contracting the purchase of a prospective property, it is recommended that a prospective resident should first obtain approval in principle from the Jersey authorities to his taking up residence. We are experienced and able to assist in this matter. To find out more about your possibilities to acquire resident status and to acquire substantial real estate in Jersey, contact us today.